Legitimacy Claims of the Auditing Profession Vis-A-Vis the Behaviour of its members: An Empirical Examination

Transferring priorities: a three-act play on transfer pricing

“…By acceding to criteria determined by a non-professional, the accountants recognized the higher power of the Chief Executive. This is similar to the situation where the independence of auditors might be subverted by the power of the client (Humphrey et al, 1992), or the seduction of the desirability of contract winning (Briloff, 1993), or professional objectivity claims might be compromised by powerful client employees (Pasewark et al, 1995). Trustco's accountants may have been trapped in a web of social relationships, where retaining their job necessitated a degree of complicity with senior management's aims, which was uncomfortable and which sits ill with the professional discharge of responsibilities (see Roslender, 1996b, pp.…”

The consideration of environmental matters in the audit of financial reports

“…Chandler (1997) explained that a legitimation crises occurs when the accountancy profession is perceived to have broken the (unwritten) code of conduct in protecting the public interest. At such times, the accountancy profession must respond to public concerns or risk losing its own legitimacy in the form of its authority to act for the public interest (Pasewark et al, 1995). Thus, to respond to public concerns and to justify the accountancy profession's co-existence with society in the midst of 'problematic legitimacy', authors suggested that the accountancy profession adopt whatever legitimation strategies are required in order to comply with the expectations of society and safeguard its own self-interest (Pasewark et al, 1995;Savage et al, 2000).…”

“…Legitimacy theory is based on perceptions: (1) of how the public (or a particular group of stakeholders) views the organisation; (2) of whether what the organisation has done is perceived as acceptable to the public (or a particular group of stakeholders). That is, only when an organisation faces a legitimacy crisis, and public concerns are raised, would the organisation adopt whatever legitimating strategies are necessary for complying with the expectations of society and safeguarding its own self-interest (Pasewark et al, 1995;Savage et al, 2000). Otherwise, the organisation carries on business as usual.…”

“…(Dowling & Pfeffer, 1975). IAPS-1010 also appeared timely in detracting attention from the huge impact the high profile accounting debacles had on auditors and accountants' role in accountability, protecting the public interest (Pasewark et al, 1995), and self-regulation (Baker, 1977). Lindblom (1993) considered this strategy as a symbolic activity which served to deflect attention from the main issue of concern (accounting failure) by portraying the audit profession's activities in environmental accountability as being compatible with societal norms and values (Ashforth & Gibbs, 1990;Pfeffer, 1981).…”

Commercialism and Its Impact on the Integrity of Professional Tax Services in the United States

“…Other studies have concluded that evidence inconsistent with a functionalist perspective, while perhaps not directly supporting critical theory, should be addressed by the profession if it is to use functionalist arguments to legitimize its continuing professional status (Pasewark et al, 1995;Roberts & Dwyer, 1998). Pasewark et al (1995) developed and tested a sequential model of hypotheses related to changes in individual auditor's levels of objectivity due to client power. Pasewark et al argue that objectivity is a core functionalist trait that legitimizes auditors' claims to professionalism.…”